Toronto Real Estate Market Likely to Crash in 2017? Is…
Are Real Estate Agents about to be Uberized?
I was just reading an interesting post by @BorisDzhingarov on Tech.co on the future of real estate sales, and he paints a picture where people will buy and sell their own homes using Internet technology. There it is again, the Uberization of everything, including the real estate industry, regardless of the risk. It seems we’re all being driven by millennials into a self-service world where everything will be as quick as ordering a pizza.
“To ‘Uberize’, remove the middleman, theme of the times.”
Let’s be honest though, real estate can be a lucrative business and it really is ready for disruption. And realty is more competitive every day. Agents and Brokerages are middlemen, who are apparently targeted for removal. I hope that’s not you, but let’s say the flock is culled. What kind of new real estate sales environment is being created and how will you adapt?
Millennials are the biggest, most wealthy group of consumers now and they’re proving to be brand agnostic and want open source everything. Throw in millions of wealthy young Chinese immigrants/investors, and you can guess that tradition in real estate is about to be replaced by a new culture — the Uber culture mostly online. On Tech.co, Boris Dzingarov suggested 3 factors will change real estate marketing greatly:
- Mobile devices
- Online reputation management
Yet, many agents are using video, have already set up mobile friendly sites, and even dressed up their Linkedin and Facebook pages. And they’re not anymore disruptive than anyone else. I think what may mark the new agent is using technology and digital marketing to connect with more prospects. What may be difficult for them though is that homebuyers and sellers may not accept their pitches. If you can’t go to them, then you’ll have to show up online so they can reach you.
If you have no digital marketing strategy to connect with prospects, make an impact, and remain visible online (top realtors are taking it all for themselves) then perhaps the forecast is as stormy as Dzhingarov is predicting.
The Outlook for Real Estate in 2016 to 2020
I’d like to take a moment to discuss what I see happening in this industry. Here’s the top 15 disruptions that may hit the real estate biz in the coming years:
- Real Estate Teams – teams loaded with extra services will battle it out with discount brokers to offer better service, particularly in the luxury real estate market where Luxury realtors will go the extra mile.
- MLS Data Freely Available to Everyone – no secrets for realtors to use as a trump card. Homeowners will feed home stats to online vendors who will provide increasing marketing power for them.
- Social Media Growth – Realtors will expand their circle of contacts via Linkedin and Facebook, and home sellers will look to engage more buyers to get higher bids for their client’s properties. Social media engagement will keep them connected and actively top of mind to prospects, as other realtors impinge on all their clientele.
- Content Marketing – more sophisticated and engaging visual content such as pdfs, and interactive home tours will let buyers drill down quickly to everything they want to know.
- Sophisticated Video – slick videos with aerial shots and stunning quality will become templated much like WordPress web sites are now
- SEO & SEM– optimizing for whoever is looking for real estate or wants to prepare for sale. This means having a good SEO is critical for inbound marketing, link building and MLS listing optimization. PPC advertising and remarketing ads will play a role too.
- Trustworthiness – the insecurity of Uberization will mean parties will be scrutinized for their reputation and professional credibility. Those realtors that have this all laid out strategically will pass the cred test.
- Thought Leader/Advisor – generosity of key realty knowledge will influence because real estate is an expensive investment that the average Joe homebuyer doesn’t understand. The realtor’s role will evolve to become a trusted advisor.
- Complete Property Transactions Done Online – from bids to closing costs, every aspect of the transaction will be done online, perhaps via a large tablet device connected to a printer. See Realtypoint’s excellent post on this.
- Google, NAR and CREA will lose control of the online realty market – homeowners will list with online entities for exposure and pay minimal fees.
- Property Management – More brokers and agents will move into the property management and mortgage business to create more relevant clients, retain them, and build visibility.
- More Real Estate Agents Will Go Out of Business – deals will disappear, commissions will fall and competition will be intense and only those with huge client bases will make it.
- Clients will gravitate to Large, insuring Finance Comapnies – these firms are capable of insuring transactions, because regular consumers are likely to make big mistakes. Right now of course you and your brokerage and (CMHC in Canada) or (FHA/PMI) in US provides it.
- Niche, Boutique Brokerages – they’ll have an edge in relevance, usefulness, and attraction to many buyers and sellers – particularly brokers that offer a la carte services, and prove they have specific types of buyers for a property (e.g., Chinese or Middle Eastern buyers).
- Intense Hyperlocal Focus – realtors and teams will use outdoor advertising and social media to dominate local markets.
The Uberization of real estate has already happened. I’m wondering which new Zillows and Trulias rise up to serve this new market? No doubt it’s being discussed in boardrooms right now. [Note: I was invited recently for interviews for a senior digital marketing position with a big, new up and coming lead generation business in Toronto].
Where Will You Be in 5 Years?
The point of this post is to ask you where you’ll be in the coming years and whether you will have initiated the steps to build your future realty business. It’s wise to start planning and connect with the people who will help you grow and sustain it.
What are you thoughts? What changes do you foresee? Will 2017 to 2020 look much different for you and your brokerage? What are you doing to help you survive and thrive? Speaking of hot markets, read the forecast, outlook, and predictions for housing in Toronto, Los Angeles, San Diego, and Vancouver.
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